Thursday, April 30, 2015

I often seek out various whiskeys to taste for comparative purposes. Sometimes though, the candidates for interesting comparisons present themselves to me rather unexpectedly. I recently had the coincidental opportunity to taste a couple of whiskeys that are oddly related.

First I was presented with a couple of bourbons from a company called Cleveland. Then about a week later a few young samples of MGPI whiskey (a bourbon and a rye) came into my possession. I was unfamiliar with Cleveland, a company that uses an accelerated aging process, but apparently they’ve been around for almost two years. MGPI is the former Seagram’s distillery in Lawrenceburg, Indiana which has gone through a series of owners since the collapse of Seagram’s in 2000. Since 2011 it has been part of MGPI, a Kansas based food and alcohol producer (confusingly, the distillery is MGP Indiana and the company that owns it is MGP Ingredients).

Accelerated aging of whiskey isn’t an entirely new concept, but recent years have seen a lot of technological development on this front. Efforts to speed up the aging process date back to at least 1886, when a steam heating system was installed in the warehouses of the OFC distillery (now known as Buffalo Trace). In the modern era, new entrants to the whiskey industry have taken advantage of warm climate regions such as Texas and the use of barrels as small as five gallons to get their products to market more quickly. Meanwhile, others have been exploring more advanced techniques to age whiskey rapidly.

Terressentia, which was formed in 2006, is one of those companies. Their TerrePURE technology relies on ultrasonic energy and forced oxygenation. They buy young bulk whiskey, apply their process to it and sell it non-distiller producers who bottle and market it. They weren’t a well known company until they bought the old Charles Medley distillery in Owensboro about a year ago, claiming it would be up and running within 18 months. It hadn’t produced whiskey since 1992, but its last owner, CL Financial, did a lot of restoration work on the plant between buying it late in 2007 and running into a liquidity crisis at the start of 2009. Terressentia also stated that in addition to using their rapid aging process, they would also age some of the whiskey traditionally.

As far as I can tell, Terressentia doesn’t own any whiskey brands. They buy young bulk whiskey, rapidly age it and sell it to companies that deal with their own marketing and distribution. Cleveland Whiskey, on the other hand, buys six month old whiskey, applies their rapid aging technology to it, then bottle and market it all themselves. Their process sounds similar Terressentia’s, but slightly different. At Cleveland the whiskey is dumped into tanks and the barrels are broken down, cut up and added to the liquid. Then a week-long process that involves agitation, rapid pressure changes and oxygen infusion is applied to the whiskey.

Of the two, Terressentia seems much more secretive. I’ve never heard of a whiskey company claiming to be one of their customers or mentioning the use of their process on the label. On top of that, if you look at the Terressentia website it appears that having their clients sign a non-disclosure agreement is a top priority. Whether you love or hate the concept of rapid aging, at least Cleveland owns the fact that the technology is an integral part of their product. They clearly state what they do right on the label and also note that the whiskey is distilled in Indiana. This is a legal requirement for any whiskey that is distilled in a state other than the one in which it is bottled, but the law is flouted by many non-distiller producers.

The only slight issue they have is their age statement. I got the six month figure from older versions of their label posted online, but the statement on the labels of the bottles that I saw said “aged less than two years”, which is essentially meaningless and not an age statement format allowed by government regulations. Unfortunately, for quite some time the TTB has been approving labels that don’t conform to the regulations regarding age statements and even misinforming producers as to when age statements are required. This issue was so pervasive that last year I even mistakenly stated that American whiskies younger than four years old and without the word “straight” on the label didn’t need an age statement. As Chuck Cowdery has reported here and here, it looks like the TTB is finally going to start properly enforcing its own rules on age statements. This is going to make it a little harder for companies that want to hide the fact that they are using rapid aging technology.

So, what is the connection between Cleveland and MGPI? As I said above, the Cleveland label notes that the whiskey is distilled in Indiana. MGPI is the only whisky distillery in Indiana, so that is clearly the source of Cleveland’s distillate. MGPI does produce five different bourbon recipes, but the “21% Rye” is the most common (and most available) one, so it’s very likely that it is the one Cleveland is using. This will essentially give me a “before and after” comparison of the 6 month old MGPI bourbon that Cleveland applies their aging process to.

There’s also another interesting, although ultimately unimportant, connection here. CL Financial, which is the Trinidad based company that owns Angostura bitters, owned the MGPI distillery from 2007 to 2011 (it was known as LDI during that time) in addition to owning the Charles Medley distillery from 2007 to 2014.

Unfortunately I didn’t have the opportunity to taste these side by side, and I really didn’t get a chance to put together proper tasting notes for the Cleveland whiskeys, just general impressions.

There are two versions of Cleveland that I tasted, The Eighty-Seven, which is 87 proof, and the Black Reserve, which is 100 proof. Both of them retail in the $30-plus-or-minus range. The Black Reserve is much darker in color, but I haven’t seen any definitive statements regarding any technical differences between the two other than proof. The back label of the Black Reserve does mention that the stave segments used in the rapid aging treatment are heat processed. That statement does not appear on the label of The Eighty-Seven, so perhaps that is part of the difference.

As for taste, The Eighty-Seven really comes across as being quite youthful. It’s kind of rough around the edges and not well-integrated. It tastes like whiskey, just not particularly good whiskey. The Black Reserve is by far a much better whiskey. It does away with the excess heat, shows some bold flavors and is fairly well composed. The only real criticism here is that the oak flavors are over attenuated. What do I mean by that? I guess the best analogy would be when one person is singing louder than the rest of the choir. They may be singing very well, just obviously much louder than everyone else in the group.

The bottle of Black Reserve that I tasted was labeled Batch 008. I’ve seen some older reviews with pictures of bottles labeled batch 003. Those reviews were so horrendous that I can only assume that they were terribly biased or that Cleveland has made some pretty big improvements to the product over the past year or two.

Could you find a better bottle of bourbon than The Black Reserve for $10 less? Sure, but you could probably also find a worse bottle for $10 more. I would be very curious to see what kind of results could be obtained by applying this process to bourbon with more age on it, maybe something four years old or so.

You’ll notice the MGPI sample bottles say Ultra Pure rather than MGPI. This has nothing to do with Terressentia’s TerrePURE process. Ultra Pure is the broker that you have to go through to get MGPI whiskey if you are buying in quantities smaller than a tanker truck. I won’t post any pricing because bulk pricing of unaged whiskey is all that is available and that’s not really relevant here. The samples are at 117 proof (bourbon) and 118 proof (rye).

I’ll start with the bourbon. The nose is bright and volatile (but not overtly hot) with strong corn aromatics and a touch of vanilla. It has good flavor development (although at this point in its life it is fairly corn-forward with a mild oak influence) and it transitions pretty smoothly from the start to the finish. There’s some serious heat on the finish and the flavors taste pretty youthful at the very end, but that’s to be expected for any six month old barrel proof bourbon sample. I tasted them more than two weeks apart, but I think I might prefer this over Cleveland’s The Eighty-Seven.

MGPI’s 95% Rye is far and away their most popular product. It first appeared in Templeton Rye and some of the High West ryes, but now it is also used for Bulleit Rye and George Dickel Rye as well as many other smaller brands. The nose has a bit of vanilla sweetness along with the characteristic rye spice notes which have a very floral manifestation here. Again, nice flavor development and smooth transitions, with some grain notes joining the floral spice and mild oak flavors. The finish doesn’t seem quite as youthful as that of the bourbon sample. Perhaps this is due to the absence of corn in the mash bill, which keeps it from having the robust corn flavors associated with youthful bourbon.

The unprecedented length of whiskey’s current boom period is starting to have some serious effects on the industry. The spot market (where excess aged whiskey is sold by distillers for whatever the going rate is) has pretty much dried up. If a company that buys whiskey from distillers to resell it didn’t start buying young or unaged whiskey under contract several years ago, they won’t have aged whiskey for several years to come. If you want to start buying barrels of whiskey from MGPI today and not sell any of it until it is five years old, you’re looking at an investment of nearly $100,000 if you purchase the minimum amount once a year. And that’s just for the barreled whiskey and warehousing. Taxes, bottling, marketing and distribution costs are all in addition to that figure. It’s not much easier if you are a new distiller; as I mentioned in another post, we’re in the midst of a very real barrel shortage. Independent Stave, far and away the biggest source for new barrels in the industry, has had current customers on allocation and a freeze on new orders for well over a year now.

Considering the current state of the industry, the appeal, even necessity of rapid aging is quite understandable. Terressentia may be secretive, but it seems like a pretty big company; they have the resources to buy and restore a defunct distillery. I suspect that there are many products on the shelf that go through Terressentia’s process unbeknownst to consumers. I’ll be honest, the 100 proof Cleveland was better than expected, and I think it’s safe to say that these rapid aging processes will be improved upon as time marches on.

Many bloggers and whiskey discussion forum pundits are currently dismissing this technology in a wholesale manner. While I’m very much a traditionalist when it comes to whiskey production, I’m also a student of history. I can’t help but think of the way that companies like Polaroid and Kodak basically drove themselves into bankruptcy by failing to recognize the importance of and embrace new technologies related to the imaging industry.

There are three paths that the big U.S. whiskey distillers can take here. They can ignore the new technology, possibly at their own peril. They can try to fight it, which would likely involve modifying the labeling requirements and legal definitions for various types of American whiskey. These companies are certainly big enough to have the resources to fund the serious lobbing effort that would be needed to push such a legislative change. Or they could embrace the technology and use it to their advantage.

It will be very interesting to see which direction the big players in the industry take, and whether they act in unity or if the issue divides them.

Sunday, April 12, 2015

I covered quite a bit of information regarding the Brown-Forman Corporation and their Old Forester brand over the course of three recent posts: Old Forester Birthday Bourbon, Old Forester 86 proof and Woodford Reserve. I’m going to taste the 100 proof version of Old Forester today, but first a quick summary with a few additional points and then a brief tangent.

I noted that Old Forester and Early Times have both been made in the same Brown-Forman owned distillery in Shively since 1979. They were also both made in the same distillery in Louisville from 1933 to 1940. From 1940 to 1979, Early Times was made in Shively and Old Forester was made in Louisville. There are some important differences between the two whiskeys though.

The first is their mash bills: Old Forester is 72% corn, 18% rye and 10% malted barley, while Early Times is 79% corn, 11% rye and 10% malted barley. Additionally, the two whiskeys are fermented with different yeast strains. Looking at their respective labels, you might also notice that Old Forester is bourbon and Early Times is not. In 1985 Early Times, at least what they bottle to sell domestically, went from being straight bourbon to being Kentucky whiskey. That change in designation was the result of some (about 20%) of the whiskey being aged in used barrels.

The last difference is the stills. When production was stopped in Louisville in 1979 the still from that facility was moved to Shively and set up next to the existing still there. They are column stills of notably different diameter. Old Forester is distilled on the smaller diameter one that was moved there from Louisville and Early Times is distilled on the larger diameter one that dates to 1955 when the Shively distillery was modernized and expanded.

And that brings me to an interesting point. In the fall of 2014 Brown-Forman announced that they would be building a new Old Forester distillery in downtown Louisville (not on the same site as the original, but less than two miles away), which should be operational by the fall of 2016. The company has stated that the new distillery will be capable of producing 100,000 cases of Old Forester per year. That is slightly less than what they sold in 2014. But production of Woodford Reserve was at 300,000 cases for the same year, and with at least 50% of the whiskey in Woodford Reserve coming from the smaller diameter still at the Shively distillery, clearly both recipes (Old Forester and Early Times) will continue to be made there even after the new distillery is functional. I’m quite curious to see if they build a replica of the smaller diameter still for the new distillery, or if they go with an entirely new still design.

While American whiskey producers have been much more restrained with price increases for most of the past decade than their Scottish counterparts, the effects of supply and demand have finally caught up and resulted in some big price jumps for American Whiskey over the last couple of years. Looking back at my Old Forester Birthday Bourbon post, you’ll see that the price of that bottling went from $40 in 2008 to $60 in 2014. A 50% increase over 6 years is a pretty dramatic rise. While the recent price jumps can be shocking, one really must put them in the context of just how undervalued American whiskey had become by the start of the recent boom.

I decided to do just that, by comparing the price of Old Forester Signature (current and from 2006) with the historical pricing of Old Forester Bonded (essentially the equivalent product, Brown-Forman changed it from Bonded to Signature around 2002 or 2003). Thanks to the key-word searchable newspaper archive on Google that dates back as far as the 1800’s, and the fact that retail whiskey prices used to be listed in newspaper ads, I was able to get a pretty good sampling of prices from the post World War II boom years.

There are a few variables to keep in mind. Bonded whiskey has a minimum age requirement of four years. Coming out of Prohibition most of the whiskey being sold as Bonded was more expensive, older product distilled prior to 1920. There was a notable price drop of Bonded whiskeys in 1938 when the distillate produced after Prohibition finally reached four years of age.

The Federal Excise Tax on distilled spirits is assessed on a proof gallon (a gallon at 50% abv) basis. The rate has changed in somewhat of a random manor over the last 75 years, creating a variable in pricing. It went from $4 to $6 in 1942, to $9 in 1944, to $10.50 in 1951, to $12.50 in 1985, and finally to its current rate of $13.50 in 1991.

During World War II the U.S. Government’s Office of Price Administration (OPA) kept prices artificially low for many products that were in short supply during the war. Those price controls ended for whiskey in October of 1946 and quick price jumps followed. At that time bonded whiskey was expected to remain a scarce commodity for several years as distillers had produced nothing but industrial alcohol for the last two years of the war, and that was followed by a period of limited production due to grain shortages.

Pricing could also vary quite a bit from one location to another around the country at any given time, as it does today. I found a good example of this from 1952 in the Eugene Register-Guard which stated that the Oregon price for Old Forester Bonded was $6.30 while the national average was $6.58. It also noted a high of $7.39 in South Dakota and a low of $5.29 in the District of Columbia.

With all that being said, I’m just going to list dates and prices with inflation corrected prices in parentheses, and follow that with tasting notes. All prices are for 1/5 gallon bottles (also referred to as 4/5 of a quart), which is essentially the same size as a modern 750 ml bottle. There is one noted exception where I included a price for a quart bottle of 86 proof Old Forester, assuming that the size and proof differences cancelled each other out.

Even under OPA price controls in 1946 a typical bottle of bonded bourbon would be priced right around $4 a bottle, which works out to $48.15 in 2015 dollars. It would have been nice to have a some more data to fill in the 1960’s and cover the 80’s and 90’s, but what I’ve put together here still does a good job of illustrating how bad things got for the bourbon industry in the 70’s and 80’s. While it’s unlikely that retail prices ever dropped during that period, they either held steady or rose at a rate that was far outpaced by inflation. Even with the market for American whiskey rebounding in the 1990’s and going into full boom mode during the following decade, when prices are corrected for inflation, they have really only risen in the past five years or so. And the prices that we have now are still a bargain relative to what was typical in the three decades following World War II.

Now on to the bourbon:

The nose has the same dark, brooding character that is evident in Woodford Reserve, but with more sweetness and in more of an elevated, spirit-driven way. On the palate it’s big and full flavored with a good balance of sweetness and oak / leather notes. A big wave of vanilla comes on from the mid-palate. It becomes somewhat aggressive as it moves into the finish, turning drier and spicier around the grain and oak core. The alcohol is obvious but not dominant. Overall its character is bold but not unruly. While the 100 proof Old Forester has a more aggressive flavor profile than 86 proof Old Forester or Woodford Reserve, it is more graceful than the 86 proof but lacks the refinement of Woodford.